Risky in Retail

Timothy Collins

Everything about luxury retail has screamed "Get back!" this earnings season. So logically, I should pack my bags and leave the notion of getting long Tumi Holdings (TUMI) into earnings, right?

Not only is this luxury retail, but a recent IPO and related to travel, which during times of economic distress doesn't seem like the place to go. This chart is just a little too enticing to pass up though. The recent IPO totes with it a short interest just above 32% and is trading about the same percentage off its recent IPO highs. The chart has been consolidating for the last two months and now seems set for $14 or $22 over the next month. Chances are the downside would come quicker than the upside, but with the huge short interest in play here any kind of surprise from TUMI could push this to $20 in a blink. That's why the August $20 calls around $0.75 are so intriguing. A move to $20 should see quick follow through. Look, this one is not going to win any prizes for its fundamentals right now, but expectations are somewhat tempered and sentiment is bearish. This is a high-risk, high-reward play, but one I am willing to take....215 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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